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This memorandum clarifies the uses of State Administrative Expense (SAE) funds for administrative and other expenses incurred in the food distribution program for child nutrition programs (USDA Foods in Schools).

The purpose of this policy memorandum is to provide direction and guidance to State Distributing Agencies (SDAs) in order to ensure compliance with legislative and regulatory requirements, and to make certain that all school food authorities (SFAs) receive their planned assistance level and maximize their use of USDA Foods to meet the nutrition standards in the National School Lunch Program (NSLP).

The purpose of this policy memorandum is to provide guidance in ensuring compliance with requirements in Subpart D of 7 CFR Part 250 with respect to crediting for, and use of donated foods in contracts with food service management companies (FSMCs).

This memorandum clarifies the requirements and options for School Food Authorities (SFAs) acting as a collective unit (including school co-ops or consortia) in performing activities relating to donated foods. It also clarifies the requirements for the distributing agency with respect to such SFAs.

In this memorandum, we present several options for consideration by the distributing agency to help ensure that service institutions receive donated foods for use in the summer meals provided in SFSP in an efficient and cost-effective manner.

Federal regulations implementing the Department’s domestic commodity donation program at 7 CFR 250.12(d), allow school food authorities (SFAs) and other recipient agencies to contract with food service management companies (FSMCs) to conduct their food service operations. In contracting with an FSMC, the recipient agency must ensure that the full value of donated foods is used to its benefit.